Crude Oil Prices Rise over Positive Demand Expectations
Oil prices jumped higher on Wednesday in the global commodity market due to positive demand expectations in China. The outlook was supported by report on Beijing economic stimulus measures to boost domestic growth amidst risk of higher tariff by the U.S in 2025
Brent climbed to $72.15 per barrel, while the US benchmark West Texas Intermediate also increased to $68.42 per barrel. The Chinese government held a meeting on Monday to discuss and analyse the economic policies for 2025.
At the meeting, a call was made to follow a more active budget and a moderately loose monetary policy for next year, and increased infrastructure spending, monetary easing, and targeted fiscal support are expected to fuel demand for energy.
These measures are expected to support higher oil consumption in China and contribute to increased market optimism, prompting the rise in oil prices. Also, in a bid to combat possible US tariffs once President-elect Donald Trump takes office in January, China’s President Xi Jinping Tuesday called for embracing global solidarity and cooperation.
Xi’s call for cooperation came as US President-elect Trump has vowed to raise high tariffs on Chinese imports which could trigger a trade war between the world’s top two economies.
‘Global solidarity, cooperation, mutual benefit, and win-win should become the defining theme of our times,’ Xi said.
‘China hopes the United States will work with China to push bilateral relations toward a steady, healthy, and sustainable direction,’ China’s president added While, market players await weekly crude inventory data to gauge demand in the US, the world’s biggest oil consumer.
Also, analysts noted that the inflation data today is crucial before the US Federal Reserve’s (Fed) last interest rate decision of the year. With recent economic indicators, the probability of a 25-basis-point rate cut at the Fed’s December 18 meeting increased to 86%.
Meanwhile, investors are closely watching the upcoming oil market reports from the International Energy Agency and the Organization of Petroleum Exporting Countries (OPEC). #Crude Oil Prices Rise over Positive Demand Expectations
